I got this idea from my friend, Sandy, who is a fantastic knitter and is very creative as well as practical. You can see her web page at http://slisen.blogspot.com/
I'm on my second to the last charity item for the year and decided to knit one of Charlene Schafer's tuck baby blankets. All turned out well except the edges curled more than I liked. Enter Sandy's fix. She folds and bastes the edges together with a contrasting color yarn. Then she puts the blanket in the washing machine for a fairly gentle cycle and also in the dryer for a bit (not drying the blanket all the way.) She lets the blanket air dry the rest of the way with the basting still in place. Voila', the edges behave. She says if you have some really stubborn edges, she refolds the opposite direction, bastes and repeats the wash/dry process.
Here are my before and after pics. I guess I should have taken a pic of the curling edges, not just the edges basted.
PS She said she usually does a running stitch as close to the edge as possible (rather than the kind of basting I did), but it appears that it doesn't matter when all is said and done.